March 29, 2017

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Assume that at the beginning of 2000 Speedy Delivery a Fed Ex competitor purchased a 737 aircraft at a cost of 60,000,000 Speedy Delivery expects the plane to remain useful for 5 years (5 million miles) and to have a residual value of 5,000,000 Speedy Delivery expects to fly the plane for 750,000 miles the first year 1,250,000 miles 2 through 4 and 500,000 miles that last year What is Speedy Delivery first year of depreciation using the Units of Production Method. Should I multiply by 5,000,000 or by 750,000 miles and then divide by by the rate. Please he me I am confused.

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